RIL’s Infotel may Join Race for 2G Spectrum Infotel Broadband’s participation in the auction may jack up spectrum prices

India's biggest company Reliance Industries is likely to bid in the upcoming 2G spectrum auction, a development that can change the contours of the auction and signals a possible strategic shift in the company's telecom venture. Executives familiar with the matter told ET that the RIL-owned Infotel Broadband, which has so far been focused on data transfer, is likely to bid aggressively in category A circles. The company is even evaluating the possibility of bidding for pan-India 2G spectrum, an executive, who did not wish to be named, said. An RIL spokesperson declined to comment on the matter.  Infotel Broadband's participation in the auction can lead to a significant rise in spectrum prices, analysts said, adding that this can impact existing players such as Bharti Airtel and Vodafone.  "High 2G auction price will have an impact on every other payout and also set a higher benchmark for future airwave auctions. Entry of an aggressive player in the 2G auctions could limit spectrum in key circles like Delhi and Mumbai and will impact larger players more," said Prashant Singhal, partner at E&Y.  With payouts related to refarming and one-time prospective charge linked to auction-determined prices, any significant increase in spectrum prices will hit both incumbents and new players such as RCom and Tata Teleservices. Since only 10 MHz of airwaves are being auctioned, RIL's entry can limit the quantity of spectrum available for other bidders. Analysts say the company's entry into the voice space is a natural extension of its data business. Infotel Broadband, the only telecom company to have pan-India broadband wireless access, or BWA, spectrum, is yet to launch its data services.  "Such a model will allow RIL to have a dual mode – with both a data offering and aback-up of 1800 MHz network. The company will face some institutional hurdles since it will have to build networks and get clearances for a pan-India network," said Kunal Bajaj, a telecom analyst. With third generation services yet to take off in India, analysts say, the world's second-largest telecom market is yet to have significant appetite for a pure play data offering, making a case for bundling of data with voice services.